The Morning Call
2/7/20
The
Market
Technical
And the beat goes
on. The Averages (29379, 3345) continued
their powerful rally, ending above their former all-time highs (29373/3337). A close above that level today will reset their very short term uptrends. Money flows remain very strong. And, of course, there is the indices’ underlying
long term technical strength.
The only
bothersome thing is the pin action in the VIX.
While it did finish slightly below its 200 DMA (now support; if it remains
there through the close next Tuesday, it will revert to resistance), it remains
elevated in what has been an explosive Market (suggesting that investors are
more risk averse than is obvious in stock prices).
Nonetheless, equity
prices are indicating that the ‘improving economic growth rate’ scenario
appears squarely back on the table.
However, GLD and TLT are lending only weak support to that notion. The dollar has been strengthening lately. Indeed, it ended above its 200 DMA for a
second day (now resistance; if it remains there through the close on Monday, it
will revert to support). If this
challenge is successful, then the technical position of UUP will improve as
well as the message of an improving economy.
Thursday in the
charts.
This week in
review.
A new round of
bubble talk.
The divergence of
stocks and bonds.
Fundamental
Headlines
Yesterday’s
stats were mixed. Weekly jobless claims
fell more than estimated, but Q4 nonfarm productivity fell short of forecasts.
Bottom line. If you ignore ( 1) the news
flow on the coronavirus, (2) the Market ignoring the news flow on the
coronavirus, (3) economic stats which are OK but are by no means pointing at
economic ‘lift off’ and just focus on the continuing robust/irresponsible global fiscal and monetary policies, then you
have been paid handsomely. Be
joyful. That will continue until it
doesn’t. But consider owning some cash.
Measuring the
changes in US/China trade, pre-coronavirus.
The latest from Ed
Yardini.
Update on
valuation.
The State of the Market.
JP Morgan adjusts portfolio weightings.
News on Stocks in Our Portfolios
C.H. Robinson Worldwide (NASDAQ:CHRW) declares $0.51/share quarterly dividend, in line with previous.
Economics
This Week’s Data
US
Weekly
jobless claims fell 14,000 versus estimates of a decline 1,000.
Q4
nonfarm productivity rose 1.4% versus forecasts of up 1.6%; unit labor costs
increased 1.4%, in line.
January
nonfarm payrolls increased by 78,000 jobs versus projections of +27,000 jobs.
International
December
Japanese YoY household spending fell 4.8% versus expectations of -1.7%; cash
earnings were 0% versus +0.5%.
The
December German trade balance was +E15.2 billion versus consensus of E14
billion; December industrial production fell 3.5% versus -0.2%.
Other
Iraq
on the brink of an energy crisis.
How
Japan has coped with Japanification.
What
I am reading today
Why so many people claim
social security at age 62.
Another example of your tax money at
work.
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for Survival’s website (http://investingforsurvival.com/home)
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